B2B Payments

Procure-To-Pay Embraces Bakeries’ 24/7 Work Ethic

A baker’s working hours are anything but the ordinary nine-to-five.

Making sure customers can get the freshest bread and pastries when the door opens at 8 a.m. means bakery owners are up before the sun. And, like many small business owners, they can also stay up well after the shop is closed for the night.

While this work ethic may produce delicious goods, it leaves little time for bakers to perform necessary — yet tedious — back-office functions.

One area with the greatest amount of friction is in procurement. Like other players in the food and beverage space, the ability to procure fresh items as needed can be a tricky task. Order too much, and perishable goods can go to waste. Order too little, and bakeries can’t fulfill orders. And as Main Street gradually moves toward reopening, small, independent bakeries cannot afford to miss out on business.

According to Bob Howland, chief digital officer at Dawn Foods, bakeries’ unorthodox operating hours and struggle to modernize back-office functions can create significant bottlenecks in the procurement process.

“Even in recent years, bakeries have relied on paper and phone-based ordering processes,” he said. “This meant bakers had to place orders during working [or] business hours, which took away from where they were needed most.”

Expanded Operating Hours

With an opportunity for bakeries to migrate their procurement operations online, Dawn Foods recently announced the rollout of its eCommerce platform designed specifically for bakeries.

In addition to supporting the digital migration of bakeries’ B2B ordering processes, Howland highlighted the importance of connecting these businesses with a way to operate during non-business hours.

During pilot testing of the platform, he said, the company discovered that more than one-quarter of the orders placed on the portal were submitted on a weekend. Nearly 30 percent were placed outside of normal business operating hours.

“With online ordering, these bakeries no longer need to worry about managing procurement during regular business hours,” he said.

This is also vital for smaller players in the space that can lack the resources and teams other companies rely upon to conduct operations like procurement.

“While other industries may have entire teams working on procurement and orders 24/7, bakeries — especially smaller ones — are tasked with not only handling order procurement, but also running the business itself,” Howland said. “This can make it difficult for bakery owners to maintain and grow their business.”

Optimizing Procurement

The need for bakers and bakery owners to conduct procurement operations during non-business hours is only one factor driving adoption of online purchasing for these businesses. Howland noted that Dawn’s pilot also revealed that nearly 90 percent of customers will place repeat orders on a weekly or bi-weekly basis, making it vital for an eCommerce solution to offer visibility into order history.

It’s also key that not only the procurement, but the payment workflow is digitized and online as well, he noted.

Rather than collaborate with a third-party payment solution provider, Dawn Foods took the route of building its own payments functionality within its platform. Dubbed the Dawn Customer Account and Payment Portal, the solution, which launched earlier this year and is now integrated into the eCommerce platform, supports digitization of B2B payments within the bakery space as well — meaning bakeries can pay for the items they procure during off-peak hours.

Between stocking grocery stores and meeting customer demand, bakeries are in a unique position to continue operating through pandemic lockdowns. But like other businesses, bakeries cannot afford to continue operating the way they had before the pandemic. Optimizing procure-to-pay workflows means keeping shelves stocked with the freshest goods and ensuring cash flows remain resilient.

According to Howland, digitizing B2B eCommerce for bakeries may be accelerating as a result of the pandemic, but it is likely to stick around well into the future.

“The COVID-19 pandemic greatly sped up digital transformation across industries as many sheltered-in-place and turned to online ordering options,” he said. “As the pandemic continues and more businesses open back up, eCommerce will play a critical role in local bakeries staying connected virtually to all of the ingredients and supplies they need.”


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.